The firm behind the world’s largest stablecoin, Tether, has finally disclosed its reserves. The move will quash some of the criticism the company has received over the backing of USDT.
Tether released a consolidated reserves report on May 19 detailing the backing of the world’s largest stablecoin, USDT.
Furthermore, the report declared that the consolidated total assets amount to at least $82.4 billion. However, just 5% of that total is in cash reserves with a figure totaling $4.1 billion.
The majority of it, or $39.2 billion, is in U.S. treasury bills. There is $20 billion worth of commercial paper and $6.8 billion in money market funds.
The rest consists of reverse repurchase agreements and non-U.S. treasury bills. The report was conducted by independent accountants MHA Cayman.
The latest Tether assurance report is available. It shows significant reductions in commercial paper and increase in U.S. treasury bills. Asset breakdown per the report is below. Very liquid portfolio. +Duration figures in footnote are good info. Source: https://t.co/bg2EGNInlq pic.twitter.com/KwbmDhoa6J
— Gabor Gurbacs (@gaborgurbacs) May 19, 2022
The specifics of the commercial paper were not disclosed. However, Tether has previously stated that it holds no paper from the embattled Chinese real estate firm Evergrande Group.
Aggregate Stablecoin Supply Shrinks
According to the Tether transparency report, the total supply of USDT is currently $74.2 billion. Furthermore, its supply has declined almost 12% from a peak of $83.2 billion earlier this month. On-chain analytics provider Glassnode attributed this to redemptions as traders cashed out of crypto and back into fiat.
The firm also reported that aggregate stablecoin supplies have declined by a total of $8.4 billion over the last month. Additionally, it stated that this has been the largest decline in history.
Tether has seen one of the largest supply declines, and it even decoupled from the dollar slightly last week. The depegging was due to the fallout of the Terra stablecoin ecosystem collapse.
Aggregate stablecoin supplies have declined by a total of $8.4B over the last month, the largest in history.
This reflects a net capital outflow from the space.
Last week, $USDC expanded by $2.64B, whilst $DAI contracted by over 24%, as debt positions were closed or liquidated. pic.twitter.com/xMrUy4gxkU
— glassnode (@glassnode) May 18, 2022
Rival stablecoin USDC has rebounded from its supply slump. There are currently 52.7 billion USDC in circulation, which is near to its all-time high. Furthermore, this stablecoin is often viewed as being slightly safer as the company is fully regulated.
Now that UST has gone, Binance USD is the third-largest stablecoin again. It also saw a dip in supply but has also recovered with a market cap of $18.6 billion.
DAI Drops 24%
Maker’s DAI stablecoin has seen a supply decline by a whopping 24% as two billion DAI was burned, according to Glassnode. DAI supply contracts when debt holders close out their positions by repaying and burning the asset. “This process can be discretionary, or forced in the event of a vault liquidation,” according to Glassnode.
The total stablecoin market capitalization is around $163 billion. This equates to around 12% of the total crypto market cap.
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